Can your government really be able to track if you never declared gains made from Bitcoin transactions?
Your government, like every government in the world is monitoring all bank transactions, that's enough for now. With time and effort, I'm sure a government could also monitor the blockchain, but I guess this isn't a priority as of today. The European Union is already talking about it, though.
New technologies will always hard on regulation, this happened to Uber in several countries, in Brazil, they even prohibited for hours a couple of time the app Whatsapp when they implanted cryptography in the conversations. The blockchain is public all right, but new developments are making more and more difficult this traceability, for example, new apps wallets are creating a different address automatically for every new deposit and implementing Lightning Network, obscuration and other technologies that will make transaction completely anonymous. So, probably they will keep track on the very end when it comes to the fiat side or similar.